The grocery store industry is one of the largest and most crowded sectors in the American economy, easily surpassing $600 billion in sales just last year. But it’s facing some tough challenges. Overhead costs have always been a constant impetus for cost-cutting, but lately trends toward local foods, fresh ingredients, and organic products are hurting giants like Walmart, Kroger and Sam’s Club. In this turbulent time, the importance of a strong brand image is emerging as a key indicator of who will thrive and who will wither.
According to Credit Suisse analyst Robert Moskow, “the top 25 U.S. food and beverage companies have lost $18 billion in market share since 2009.” This is largely the result of the nation’s trend toward organic foods.
Unfortunately, that same trend is pulling away from ultra-centralized grocery shopping. That worries the megastores, and to the student of branding, this lesson should be remembered: a watered-down brand built exclusively around low prices, like Walmart’s, is easily turned against you. Don’t just take my word for it; listen to the scientists.
In a new study released by C Space, a consulting firm out of Boston, the behavior of today’s shoppers was revealed in some fascinating new trends. It found that the top two things shoppers want are “Not to feel ripped off” (43%) and “Consistent customer service” (41%). As to the first, one may think that “not feeling ripped off” is an area where Walmart does well. However, the study found that 83% of Walmart’s mentions were negative.
Trader Joe’s was the big winner, with 90% of its mentions being positive. The study also found that, primarily, “customer loyalty is driven by consumers’ perceptions of the [Trader Joe’s] brand and its values and offerings.” On that same token, Costco was the most beloved retailer among big box brands. Customers reportedly praised the company on its customer service and consistent quality.
The big takeaway here is that brand status can go a long way, especially in a crowded and competitive industry. BRAIN-DING is the art of keeping your brand at the center of your strategy – something Trader Joe’s knows well!
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